1. http://tomuse.com/daily-deal-sites-groupon-disadvantages-local-business-advertising/
2. http://www.sitejabber.com/blog/2010/10/06/the-pros-and-cons-of-daily-deals-further-explained/
3. http://www.moneycrashers.com/the-pros-and-cons-of-%E2%80%9Cdaily-deals%E2%80%9D-websites/
4. http://www.my3cents.com/showReview.cgi?id=75164
5. http://www.woot.com/forums/viewpost.aspx?postid=1139203
6. http://www.pwc.com/us/en/forensic-services/publications/trademark-dilution.jhtml
7. http://www.enotes.com/topic/Trademark_dilution
Tuesday, January 11, 2011
Groupon LivingSocial Problem -- Local Business Promotion Through Daily Deal Sites May Collapse Your Business - Part III
No Customer Address Gained – creating a customer database is an asset of any business, and hopefully one of the primary goal of the business owner. A storing customer database will give the extra-ordinary mileage to any business. But in case of daily deal aggregator sites, they can’t share their user information to any other business owners.
Proposed Solution – the best way to get their details, while they come into the merchant establishment.
Poor Employees Moral – while the business owners start advertisement campaigns through daily deal aggregator sites, immediately they get the huge sales leads, but after completion of the discount period they will come into the regular competition, not only that, during this period – employees will get very low tip with a great workload. As a result of this the performance and the moral will be definitely dropped.
Proposed Solution – only possible solution is, ad-hoc basis temporary staffing.
It Encourage Needless Spending – generating revenue is the prime factor for every business. But provoking customers for needless buying is a bad business idea, Daily deal sites, usually offers unbelievable price to their customers. For example – a daily deal site offer 50% off in an excellent quality cell phone, it is very had to ignore the offer. Most of them have a very unique feature called – group buying. It is basically facilitates the customers to share the deal with their friends, family and coworkers. This feature simply creates pressure on customers. Because if he /
she do not accept the deal, then others can’t take benefit from it. This way those daily deal sites increases the needless buying habit on their customers.
Proposed Solution – hopefully, this is most complicated issue among all the issues. These only can possible if the business owners associations or business guilds and other promotional media aware the customer to resist the needless buying habits.
Rare Refund – it is very unfortunate reality of daily deal sites, they usually do not refund. Like BuyWithMe, Woot and many other daily deal aggregator sites has their own “No Refund” Policy. This "No Refund" policy is nothing but indicating the poor customer services and clarifies their view
towards acquiring the new merchants and shoppers. As well as, returning the products is equally difficult. This is one of main reason of the poor customer satisfaction.
Proposed Solution – This issue usually has two aspects. One from the customer’s aspect and another is – daily deals and business owners’ aspect. Before making any purchase, the customer must aware of the refund policies. Where as, the merchants and the daily deal sites need to clarify their product and price refund policies.
Tight Constraints on Merchants – daily deal sites usually beneficial for merchants for huge sales leads. On the other hand daily deal sites survive on the strength of their deals. If they are unable to offer the good amount of discounts to their customers, simply they loose their business. Therefore many sites push their merchants to reduce their price and offer a good discount to their customers. This push creates constraints for the business owners and creates an irrecoverable state of generating minimum profit.
Proposed Solution – this is completely depending upon the daily deals sites. They must stop to push the merchants to provide the discounts for their business sake.
One Bad Experience Ruins the Rest – as mentioned earlier, huge workload, weak manpower and poor business set up can’t handle the large sales pressure and related customer service. As a result of this, the customers will make comment of different online portals and that will affect the business reputation. One poor customer feedback can block numbers of potential customers.
Proposed Solution – Only good customer service can protect the situation.
Product Availability – usually all major daily deal sites like Groupon has a very huge targeted audience and customer base. As a result of this, the “Featured Product” will sold immediately. The business owners provide very few amounts of “Featured Products” for those sites for promotional purpose. This is one of the minor but very interesting part of the customer dissatisfaction.
Proposed Solution – by providing the good amount of “Featured Products” can rectify the issue.
Another "Time Killer" Online – searching the deals among the wide list of choices is very difficult. To search the perfect deal for the customer, they spend a huge amount of time to surf the daily deal websites. The “Time” they spend on the sites doesn’t return anything. The "Time" is not very little; the customers spend a significant amount of times on those sites.
Proposed Solution – the best way to get rid of this is – make a mailing list based on the product and service category and mail the daily deal to the customers with different distribution channels like – RSS, mobile content deliver, SMS and many other formats. So, that the customers do not need to surf the whole site to find their deals.
Proposed Solution – the best way to get their details, while they come into the merchant establishment.
Poor Employees Moral – while the business owners start advertisement campaigns through daily deal aggregator sites, immediately they get the huge sales leads, but after completion of the discount period they will come into the regular competition, not only that, during this period – employees will get very low tip with a great workload. As a result of this the performance and the moral will be definitely dropped.
Proposed Solution – only possible solution is, ad-hoc basis temporary staffing.
It Encourage Needless Spending – generating revenue is the prime factor for every business. But provoking customers for needless buying is a bad business idea, Daily deal sites, usually offers unbelievable price to their customers. For example – a daily deal site offer 50% off in an excellent quality cell phone, it is very had to ignore the offer. Most of them have a very unique feature called – group buying. It is basically facilitates the customers to share the deal with their friends, family and coworkers. This feature simply creates pressure on customers. Because if he /
she do not accept the deal, then others can’t take benefit from it. This way those daily deal sites increases the needless buying habit on their customers.
Proposed Solution – hopefully, this is most complicated issue among all the issues. These only can possible if the business owners associations or business guilds and other promotional media aware the customer to resist the needless buying habits.
Rare Refund – it is very unfortunate reality of daily deal sites, they usually do not refund. Like BuyWithMe, Woot and many other daily deal aggregator sites has their own “No Refund” Policy. This "No Refund" policy is nothing but indicating the poor customer services and clarifies their view
towards acquiring the new merchants and shoppers. As well as, returning the products is equally difficult. This is one of main reason of the poor customer satisfaction.
Proposed Solution – This issue usually has two aspects. One from the customer’s aspect and another is – daily deals and business owners’ aspect. Before making any purchase, the customer must aware of the refund policies. Where as, the merchants and the daily deal sites need to clarify their product and price refund policies.
Tight Constraints on Merchants – daily deal sites usually beneficial for merchants for huge sales leads. On the other hand daily deal sites survive on the strength of their deals. If they are unable to offer the good amount of discounts to their customers, simply they loose their business. Therefore many sites push their merchants to reduce their price and offer a good discount to their customers. This push creates constraints for the business owners and creates an irrecoverable state of generating minimum profit.
Proposed Solution – this is completely depending upon the daily deals sites. They must stop to push the merchants to provide the discounts for their business sake.
One Bad Experience Ruins the Rest – as mentioned earlier, huge workload, weak manpower and poor business set up can’t handle the large sales pressure and related customer service. As a result of this, the customers will make comment of different online portals and that will affect the business reputation. One poor customer feedback can block numbers of potential customers.
Proposed Solution – Only good customer service can protect the situation.
Product Availability – usually all major daily deal sites like Groupon has a very huge targeted audience and customer base. As a result of this, the “Featured Product” will sold immediately. The business owners provide very few amounts of “Featured Products” for those sites for promotional purpose. This is one of the minor but very interesting part of the customer dissatisfaction.
Proposed Solution – by providing the good amount of “Featured Products” can rectify the issue.
Another "Time Killer" Online – searching the deals among the wide list of choices is very difficult. To search the perfect deal for the customer, they spend a huge amount of time to surf the daily deal websites. The “Time” they spend on the sites doesn’t return anything. The "Time" is not very little; the customers spend a significant amount of times on those sites.
Proposed Solution – the best way to get rid of this is – make a mailing list based on the product and service category and mail the daily deal to the customers with different distribution channels like – RSS, mobile content deliver, SMS and many other formats. So, that the customers do not need to surf the whole site to find their deals.
Groupon LivingSocial Problem -- Local Business Promotion Through Daily Deal Sites May Collapse Your Business - Part II
Less Online Traffic and Links – daily deals aggregators definitely increase the foot traffic in the merchant establishments. But is unable to provide more traffic toward in the business’s web site. Where as, a normal PPC or other online advertisement campaign can do for you. Conventional online advertisement campaign may generate less foot traffic for merchant establishment, but it can generate more traffic on business’s website, not only that, daily deal aggregator sites generate business lead for very short period, where as traditional advertisement campaign generate business lead for lifetime.
Proposed Solution – they only possible way to defeat the issue is, apart from the daily deal advertisement, continue the other online marketing strategy through out the year. This only helps the business to get the quality and returning customers for long time.
Hiring More Employees – when a business start advertising with the daily deal aggregators, right away, the business will get the business leads; Due to heavy workload. To maintain the proper quality of the product and services, the business needs more employees to satisfy the customer’s need. Recruiting new employees is not a simple task. The task involves – job listing, interview, training for the employees as well as those process involves huge amount of extra-cost and take some time to get the perfection from them.
Proposed Solution – If the business not having the enough manpower; the recommended solution is – try to get the employees in ad-hoc basis with low cost and before doing that create a team for recruiting those staffs on ad-hoc basis.
Poor Profit Margins – for the sake of advertisement and huge foot traffic in merchant establishment, business owners can sacrifice their profit. But the break-even is accepted, because the daily deal
can only provide the 25% of the profit, because the other part of the discount will take by the daily deal site as their credit. A recent study conducted by Rice University discovers some shocking truth about the actual profitability of a GroupOn campaign. According to researchers, a significant percentage (32%) was not profitable. Another biggest issue is – nearly 25% of the coupon actually
redeemed and only 15% is the rate of returning customer. That is – only 15% of customer interested to get the coupon and redeem it.
Proposed Solution – As mentioned earlier, create a stone hedge on the price, before launching the campaign.
Short Lived Exposure – daily deals aggregators will only provide the business leads for few days. After those days, the business comes into the regular competition with extra overheads, that also
harmful for the entire business structure as well as the employees too.
Proposed Solution – as mentioned earlier, only regular-basis online advertisement campaign (Traditional advertisement campaigns like – PPC and others…) can give the perfect result.
Proposed Solution – they only possible way to defeat the issue is, apart from the daily deal advertisement, continue the other online marketing strategy through out the year. This only helps the business to get the quality and returning customers for long time.
Hiring More Employees – when a business start advertising with the daily deal aggregators, right away, the business will get the business leads; Due to heavy workload. To maintain the proper quality of the product and services, the business needs more employees to satisfy the customer’s need. Recruiting new employees is not a simple task. The task involves – job listing, interview, training for the employees as well as those process involves huge amount of extra-cost and take some time to get the perfection from them.
Proposed Solution – If the business not having the enough manpower; the recommended solution is – try to get the employees in ad-hoc basis with low cost and before doing that create a team for recruiting those staffs on ad-hoc basis.
Poor Profit Margins – for the sake of advertisement and huge foot traffic in merchant establishment, business owners can sacrifice their profit. But the break-even is accepted, because the daily deal
can only provide the 25% of the profit, because the other part of the discount will take by the daily deal site as their credit. A recent study conducted by Rice University discovers some shocking truth about the actual profitability of a GroupOn campaign. According to researchers, a significant percentage (32%) was not profitable. Another biggest issue is – nearly 25% of the coupon actually
redeemed and only 15% is the rate of returning customer. That is – only 15% of customer interested to get the coupon and redeem it.
Proposed Solution – As mentioned earlier, create a stone hedge on the price, before launching the campaign.
Short Lived Exposure – daily deals aggregators will only provide the business leads for few days. After those days, the business comes into the regular competition with extra overheads, that also
harmful for the entire business structure as well as the employees too.
Proposed Solution – as mentioned earlier, only regular-basis online advertisement campaign (Traditional advertisement campaigns like – PPC and others…) can give the perfect result.
Groupon LivingSocial Problem -- Local Business Promotion Through Daily Deal Sites May Collapse Your Business
Problem Statement – undoubtedly, the daily deals websites like – Groupon,LivingSocial, Tipper,BuyWithMe and many more other sites has a great impact on local business and their promotions. They are not online coupon distribution sites; they have another aspects in today’s marketing era, which is commonly known as social buying. Apart form its huge sales generation features; it can do more
harm then good for your company, if you are a small or medium sized business owner.
Analysis:
More Expenses – Usually, all daily deal sites offer 50% off on the original price as discounted price. Beside that, Groupon keeps 50% on all voucher sales. Thus the business owners earn only 25% of the generated sales through a daily deal aggregator site.
Proposed Solution – Need in-depth price analysis, before going for a daily deal advertisement campaign.
Brand Dilution – brand dilution is the weakening of the brand due to over use of the brand name.Immense price cut surely damage the brand image. It takes its place while the brand competing with other higher quality products and services with a massive sales lead generation. By providing the huge discount may causes the vulnerable brand name and reduce the seeming value by the customer. For more protecting measures, please Check my Next Post.
Proposed Solution – Need strong brand building and brand establishment countermeasures before launching any daily deal advertise campaign.
Attracting the Wrong Customers – some business owners using the daily deal aggregator for their promotional purpose. But unfortunately, the daily deal aggregator sites are not being able to reach to the right and targeted customers. According to the business owners – the customers referred form those sites are just spend only the necessary amount of money in order to redeem their coupons or
deals. This also affects the lower tips on average and a lower rate of tipping.
Proposed Solution – This is one of very difficult part of this campaign. The best practice is – using localized content delivery system to reach the targeted customers.
Too Many Concurrent Users – the power of group buying or daily deal site is extensive. Those sites can generate a really huge numbers of buyers for your business. It is good for every business to generate the new business leads. But alternatively, within a very short period, huge amount of business leads can collapse your business infrastructure as well as create poor quality of customer services. This situation is not acceptable for any business. It will more destructive if the business doesn’t have enough manpower and well-established infrastructure, because new customers always need special attention. As result of this, customers will suffer with poor quality of services and the online rating of the business surely dropped.
Proposed Solution – the best way to handle the situation is, build a good enough manpower resource on ad-hoc basis and develop the strong business infrastructure including the product supply line (If any); After that going for the campaign.
harm then good for your company, if you are a small or medium sized business owner.
Analysis:
More Expenses – Usually, all daily deal sites offer 50% off on the original price as discounted price. Beside that, Groupon keeps 50% on all voucher sales. Thus the business owners earn only 25% of the generated sales through a daily deal aggregator site.
Proposed Solution – Need in-depth price analysis, before going for a daily deal advertisement campaign.
Brand Dilution – brand dilution is the weakening of the brand due to over use of the brand name.Immense price cut surely damage the brand image. It takes its place while the brand competing with other higher quality products and services with a massive sales lead generation. By providing the huge discount may causes the vulnerable brand name and reduce the seeming value by the customer. For more protecting measures, please Check my Next Post.
Proposed Solution – Need strong brand building and brand establishment countermeasures before launching any daily deal advertise campaign.
Attracting the Wrong Customers – some business owners using the daily deal aggregator for their promotional purpose. But unfortunately, the daily deal aggregator sites are not being able to reach to the right and targeted customers. According to the business owners – the customers referred form those sites are just spend only the necessary amount of money in order to redeem their coupons or
deals. This also affects the lower tips on average and a lower rate of tipping.
Proposed Solution – This is one of very difficult part of this campaign. The best practice is – using localized content delivery system to reach the targeted customers.
Too Many Concurrent Users – the power of group buying or daily deal site is extensive. Those sites can generate a really huge numbers of buyers for your business. It is good for every business to generate the new business leads. But alternatively, within a very short period, huge amount of business leads can collapse your business infrastructure as well as create poor quality of customer services. This situation is not acceptable for any business. It will more destructive if the business doesn’t have enough manpower and well-established infrastructure, because new customers always need special attention. As result of this, customers will suffer with poor quality of services and the online rating of the business surely dropped.
Proposed Solution – the best way to handle the situation is, build a good enough manpower resource on ad-hoc basis and develop the strong business infrastructure including the product supply line (If any); After that going for the campaign.
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